Bitcoin Trading Halted For System Upgrades After Panic Sales

Bitcoin trading is now on hold until tomorrow at Mt. Gox, the leading exchange for the virtual currency. This comes after yesterday’s sudden drop in price that sent the currency’s value down to $105 on Wednesday after spiking at $266 the same day.

This morning Mt. Gox posted a press release with an update on the situation. Mt. Gox said it will not be accepting orders for now, but it will allow investors to cancel their pending and open orders.

Late last week it said it had been the victim of service attacks by hackers wanting to take advantage of the rapidly skyrocketing currency. Today the exchange said that the panic sale which went on Wednesday was not the result of another hacker attack, but because of its own success.

Mt. Gox said the “rather astonishing” number of new accounts opened within the last few days plus the number of accounts it already had, in addition to the amount of trades being made, impacted the system on a dramatic scale and caused it to begin lagging. According to the exchange, the lag caused investors to panic and start selling off bitcoins in large quantities, “resulting in an increase of trade that ultimately froze the trade engine!”

The exchange reported that the number of bitcoin trades executed has tripled within the last day. Also it said the number of new accounts opened went from 60,000 for March alone to 75,000 for the “first few days of April.” Mt. Gox now said it has about 20,000 new accounts being created daily.

The exchange said it is working to catch up with demand and will continue releasing updates throughout the day and over the next few days as it improves the overall performance of its system. It also said it may be adding several new servers to the system.